Exercise 5-6A Income tax effect of shifting from FIFO to LIFO LO 5-1 (The following information applies to the questions displayed below.] The following information pertains to the inventory of Parvin Company during Year 2: Jan. 1 Apr 1 Oct. 1 Beginning Inventory Purchased Purchased 500 units @ $ 34 350 units @ $ 39 700 units $.42 During Year 2, Parvin sold 3,200 units of inventory at $100 per unit and incurred $48,000 of operating expenses. Parvin currently uses the FIFO method but is considering a change to LIFO. All transactions are cash transactions. Assume a percent income tax rate. Parvin started the period with cash of $88,000, inventory of $17,000, common stock of $63,000, and retained earnings of $42,000. kercise 5-6A Part b Prepare income statements using FIFO and LIFO. PARVIN COMPANY Income Statements